Roll-out of infrastructure projects held back by red tape in public, private sectors
Cape Town - Ahead of hosting the third South Africa Investment Conference which took place today and tomorrow, President Cyril Ramaphosa has played up the importance of infrastructure development as an employment stimulus measure and a key to boosting South Africa’s productivity and that of its citizens.
In his weekly letter to the country, Ramaphosa said: “Investor confidence has been boosted by, among other things, the establishment of the Infrastructure Fund. The conference will demonstrate that South Africa remains an attractive investment destination, and will show the progress we are making to improve the business climate. It will build on the positive momentum in investment in the years before the onset of the Covid-19 pandemic.
“Foreign direct investment flows into South Africa, for example, rose sharply from R26.8 billion in 2017 to R70.6bn in 2018.”
However, the Western Cape Property Development Forum has pointed out a hindrance to the rolling out of public infrastructure projects.
Chairperson Deon van Zyl said: “Public procurement processes are the largest stumbling block to rolling out public infrastructure.
“In June, Public Works and Infrastructure Minister Patricia de Lille announced 276 projects aimed to fast-track a robust infrastructure pipeline purported to set South Africa’s economy back on track and kick-start the flailing property development and construction industry.
“Ironically, it is, to a large extent, the way in which the public sector has tied up our industry in red tape and legislation for years that has led to the critical situation we are now in,” he said. “Especially when it comes to procurement, which includes tendering…
“With government’s own inability to get its projects to market, the construction industry is desperate for private-sector projects to hit the ground. Yet applications by the private sector are also severely hindered by government red tape and ineffective bureaucracies, with statutory approvals required just being too slow for projects to remain economically viable.
“This means that private projects stagnate due to rising costs even before a shovel hits the ground, and thousands of planned jobs for construction workers… never materialise.
“Government is not spending money on its projects and is also actively delaying the spending by private-sector clients on their own projects due to delays in processing applications.
“While we believe the bill is a valiant attempt at ensuring that procurement becomes more transparent … it remains to be seen if the culture of change which the bill proposes will filter down to local municipal levels.”
Chief operating officer of civil engineering and construction company Civils 2000, Chris Botha, said: “Most contractors hope to have a funnel of work and to convert at least 10% of projects tendered into awarded projects. However, a huge frustration in terms of government projects is the withdrawal of tenders resulting in no awards being made at all.”